House Republican bill looks to overhaul PURPA law

Source: Jeremy Dillon, E&E News reporter • Posted: Friday, March 8, 2019

Michigan Republican Rep. Tim Walberg reintroduced legislation this week to overhaul a 1970s energy law that requires utilities to purchase power from small-scale renewable energy projects.

H.R. 1502 is unlikely to move forward this Congress, especially with Democrats in control of the chamber with an eye toward pushing more renewables onto the grid.

But the legislation embodies concern about companies gaming Public Utility Regulatory Policies Act (PURPA) provisions and making electricity more expensive.

“The energy landscape has changed significantly over the last 40 years, and many challenges of that era no longer exist,” Walberg said in a statement.

“Domestic energy resources are abundant, and it’s high time to modernize this law to reflect the new realities in our energy markets and to lower the utility bills of Michiganders and Americans across the country,” he said.

Similar legislation was introduced last year. The Energy and Commerce Committee held a hearing on PURPA but did not move to vote on the proposal.

Originally enacted in 1978, the law was meant to boost domestic energy and promote renewables. It requires producers to purchase power from qualifying facilities.

In an age of cheap natural gas and utility-scale renewable projects, PURPA fixed-price contracts can sometimes work as a drag on energy prices, opponents say.

Among its provisions, the legislation looks to make sure more than two qualifying facilities owned by the same operator are not placed within 1 mile of each other.

The bill would lower the threshold for energy required for purchase to 20 megawatts. It would also enable states to waive the purchase obligation if power from the qualifying facilities is not needed.

Even though Walberg’s bill is unlikely to move anytime soon, the Federal Energy Regulatory Commission may take some action to tinker with PURPA’s regulatory responsibilities.

A collection of conservative groups, led by Trump transition team members Myron Ebell and Tom Pyle, wrote to FERC Chairman Neil Chatterjee to urge the commission to take up a “comprehensive” PURPA overhaul.

Citing the increase of domestic energy supplies, the groups argued that the law effectively acts as an energy mandate, distorting the market.

“Yet in the face of this, PURPA’s stale, static federal mandates remain in place, distorting markets and harming consumers,” the groups said.

“Moreover, to the extent allowable by law, we urge FERC to pursue comprehensive PURPA reform, covering not only the so-called ‘one-mile rule,’ but also, among other things, the methods by which states calculate avoided cost for qualifying facilities and PURPA’s outdated mandatory purchase obligation,” the group added.

Chatterjee told the National Association of Regulatory Utility Commissioners during its winter meeting that PURPA ranked among the top policy priorities he would like to see the commission tackle in the coming year (Energywire, Feb. 14).